Coral reefs are being critically impacted by anthropogenic processes throughout the world. Long term monitoring is essential to the understanding of coral reef response to human impacts and the effectiveness of corrective management efforts. Here we reevaluated a valuable coral reef baseline established in Pelekane Bay, Hawaiʻi during 1976 and subsequently resurveyed in 1996. During this time interval substantial impacts occurred followed by extensive corrective measures. Coral and fish communities showed dramatic declines from 1977 to 1996 due to massive harbor construction and suboptimal land management practices on the watershed. More recently, corrective measures in the form of watershed stabilization and fishing regulations have been implemented. Consequently our 2012 survey reveals that coral cover since 1996 has increased slightly accompanied by a significant increase in fish abundance, diversity, and evenness. This improvement can be attributed to lower fishing pressure since 1996 due to reduced shoreline access, tighter fishing regulations and increased monitoring of legal and illegal fishing activities. Stabilization of the coral community can be attributed partially to reduced sedimentation resulting from watershed restoration that included installation of sediment check dams, control of feral ungulates, controlled grazing and replanting of native vegetation. Insights into the mechanism that removes sediment from reefs was provided by a major storm event and a tsunami that remobilized and flushed out sediment deposits. The increase in herbivorous fishes probably played a role in reducing algal competition in favor of corals. The data suggest that the precipitous reef decline in this area has been arrested and offers support for the corrective actions previously undertaken.